Cloetta Interim Report Q3 2016 - Presentation

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Q3 2016 results – 27 October 2016

Danko Maras, Interim President and CEO/CFO

Jacob Broberg, SVP IR

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Continued improved operating profit

• Net sales for the quarter decreased by 0.8 per cent to SEK 1,448m (1,459),

including a negative impact of foreign exchange rates of -0.1 per cent.

• Operating profit increased to SEK 216m (212).

• Operating profit, adjusted, increased to SEK 224m (194).

• Cash flow from operating activities amounted to SEK 116m (174).

• Net debt/EBITDA ratio was 2.76x (3.39).

• New loan agreement has been entered into and senior secured notes have been

redeemed.

Q3 highlights

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Overall market and sales development

Sales declined somewhat

Cloetta´s main markets

• Overall slightly positive or unchanged market

development in all countries, except Denmark

and Norway.

• Organic sales growth -0.7 per cent.

• Sales grew in Sweden, Finland, Italy, Norway

and the export markets, and declined in the

Netherlands, the UK, Germany and Denmark.

Also contract manufacturing declined.

• Positive sales trend in Sweden and Finland

predominantly driven by pick-and-mix.

• Drop in sales in the UK partly attributable to

weaker British pound. In the Netherlands, sales

of special products to discounters declined.

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Key ratios,

SEKm

Jul-Sep

2016

Margin

%

Change

%

Jul-Sep

2015

Margin

%

Rolling

12

Full year

2015

Net sales 1,448 -0.8 1,459 5,790 5,674

Gross profit 574 39.6 1.6 565 38.7 2,283 2,211

Operating profit, adjusted 224 15.5 15.5 194 13.3 755 690

Operating profit (EBIT) 216 14.9 1.9 212 14.5 705 671

Net financial items -71 -43 -197 -178

Profit before tax 145 -14.2 169 508 493

Profit for the period 108 -16.9 130 386 386

Continued improved operating profit

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Changes in net sales Jul-Sep

2016

Jan-Sep

2016

Full year

2015

Organic growth -0.7% 0.2% 1.5%

Structural changes - 3.1% 3.9%

Changes in exchange rates -0.1% -0.4% 1.4%

Total -0.8% 2.9% 6.8%

Changes in net sales

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Net sales, Operating profit and

Operating profit, adjusted

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Net sales Operating profit (EBIT) Operating profit, adjusted

52

85

178

262

90

130

212

239

108

142

216

0

50

100

150

200

250

300

Q1 Q2 Q3 Q4

SE

Km

74

108

193

257

108

133

194

255

126

150

224

0

50

100

150

200

250

300

Q1 Q2 Q3 Q4

SE

Km

1,200

0

1,700

1,600

1,500

1,400

1,300

Q4

1,622

1,579

Q3

1,448 1,459

1,303

Q2

1,362

1,280

SE

Km

1,238

Q1

1,358

1,313

1,193

2016 2015 2014

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Strong cash flow from operating activities

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-35

125 93

147

-16 -23

54

116

91 44

75

290 223

163 174

367

253

114 116

330

131

500

927

-200

0

200

400

600

800

1000

1200

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

SE

Km

Cash flow from operating activities Cash flow from operating activities (rolling 12 months)

2012 2013 2014 2015 2016

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SEKm Jul-Sep

2016

Jul-Sep

2015

Rolling

12

Full year

2015

Cash flow from operating activities before changes in working

capital

219 236 784 697

Cash flow from changes in working capital -103 -62 66 230

Cash flow from operating activities 116 174 850 927

Cash flow from investments in property, plant and equipment

and intangible assets

-42 -30 -160 -161

Cash flow from other investing activities -105 -206 -105 -206

Cash flow from investing activities -147 -236 -265 -367

Cash flow from operating and investing activities -31 -62 585 560

Cash flow from financing activities 213 -28 -320 -518

Cash flow for the period 182 -90 265 42

Cash flow

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Stable net debt/EBITDA despite dividend payments

2013

Financial leverage

4,5

4,0

5,0

3,5

3,0

2,5

0,0

Q3 Q2 Q1 Q4 Q3 Q2

2,50 Target

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1

2014 2015 2016

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New loan agreement will reduce cost

• New loan agreement with four banks equivalent to SEK 3,700m

– Term loan of EUR 175m with a tenor of three to five years

– Credit facility of EUR 120m with a tenor of five years

– Bridge loan of SEK 1,000m with a tenor of one to two years to redeem Bond

• The SEK 1,000m Bond was redeemed in September

• Net financial items will be reduced by SEK 140m over a five year period compared to

previous financing

– Whereof SEK 50m in 2017

– One-off expenses of SEK 49m in net financial items in Q3, 2016

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Seasonal sales

in Italy and

abolition of

confectionery tax

in Finland

Closure and

transfer of

factory in Dieren

Drive initiatives

within pick-and-

mix

In focus

11

Profitable

growth

12

Sweden Denmark

Q3 selection of product launches

Finland

The Netherlands Norway

Italy

Travel retail

and Denmark Sweden and

Norway

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Arial, Bold, 80 pt, white Q&A

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Disclaimer

• This presentation has been prepared by Cloetta AB (publ) (the “Company”) solely for use at this presentation and is furnished to you solely for your information and may not be reproduced or redistributed, in whole or in part, to any other person. The presentation does not constitute an invitation or offer to acquire, purchase or subscribe for securities. By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations.

• This presentation is not for presentation or transmission into the United States or to any U.S. person, as that term is defined under Regulation S promulgated under the Securities Act of 1933, as amended.

• This presentation contains various forward-looking statements that reflect management’s current views with respect to future events and financial and operational performance. The words “believe,” “expect,” “anticipate,” “intend,” “may,” “plan,” “estimate,” “should,” “could,” “aim,” “target,” “might,” or, in each case, their negative, or similar expressions identify certain of these forward-looking statements. Others can be identified from the context in which the statements are made. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which are in some cases beyond the Company’s control and may cause actual results or performance to differ materially from those expressed or implied from such forward-looking statements. These risks include but are not limited to the Company’s ability to operate profitably, maintain its competitive position, to promote and improve its reputation and the awareness of the brands in its portfolio, to successfully operate its growth strategy and the impact of changes in pricing policies, political and regulatory developments in the markets in which the Company operates, and other risks.

• The information and opinions contained in this document are provided as at the date of this presentation and are subject to change without notice.

• No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein. Accordingly, none of the Company, or any of its principal shareholders or subsidiary undertakings or any of such person’s officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document.

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Cloetta Interim Report Q3 2016 - Presentation

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Transcript of Cloetta Interim Report Q3 2016 - Presentation